☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2015

or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ..... to …..

Commission file number: 001-14669

HELEN OF TROY LIMITED

(Exact name of registrant as specified in its charter)

Bermuda

74-2692550

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

Clarenden House

2 Church Street

Hamilton, Bermuda

(Address of principal executive offices)

1 Helen of Troy Plaza

El Paso, Texas

79912

(Registrant’s United States Mailing Address)

(Zip Code)

(915) 225-8000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes ☒ No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The accompanying consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly our consolidated financial position as of August 31, 2015 and February 28, 2015, and the results of our consolidated operations for the interim periods presented.We follow the same accounting policies when preparing quarterly financial data as we use for preparing annual data. These statements should be read in conjunction with the consolidated financial statements and the notes included in our latest annual report on Form 10-K for the fiscal year ended February 28, 2015, and our other reports on file with the Securities and Exchange Commission (the “SEC”).

In this report and the accompanying consolidated condensed financial statements and notes, unless otherwise indicated or the context suggests otherwise, references to “the Company”, “our Company”, “Helen of Troy”, “we”, “us”, or “our” refer to Helen of Troy Limited and its subsidiaries. We refer to the Company's common shares, par value $0.10 per share, as “common stock.” References to “OXO” refer to the operations of OXO International and certain of its affiliated subsidiaries that comprise our Housewares segment. References to “Kaz” refer to the operations of Kaz, Inc. and its subsidiaries, which comprise a segment within the Company referred to as the Healthcare / Home Environment segment. References to “Healthy Directions” refer to the operations of Healthy Directions, LLC and its subsidiaries, acquired on June 30, 2014, that comprise the Nutritional Supplements segment. We use product and service names in this report for identification purposes only and they may be protected in the United States and other jurisdictions by trademarks, trade names, service marks, and other intellectual property rights of the Company and other parties. The absence of a specific attribution in connection with any such mark does not constitute a waiver of any such right. All trademarks, trade names, service marks, and logos referenced herein belong to their respective owners. References to “the FASB” refer to the Financial Accounting Standards Board. References to “GAAP” refer to U.S. generally accepted accounting principles. References to “ASU” refer to the codification of GAAP in the Accounting Standards Updates issued by the FASB. References to “ASC” refer to the codification of GAAP in the Accounting Standards Codification issued by the FASB.

We are a global designer, developer, importer, marketer, and distributor of an expanding portfolio of brand-name consumer products. We have four segments: Housewares, Healthcare / Home Environment, Nutritional Supplements, and Beauty (formerly referred to as “Personal Care”). Our Housewares segment provides a broad range of innovative consumer products for the home. Product offerings include food preparation tools, gadgets, storage containers, cleaning, organization, and baby and toddler care products. The Healthcare / Home Environment segment focuses on healthcare devices such as thermometers, humidifiers, blood pressure monitors, and heating pads; water filtration systems, and small home appliances such as portable heaters, fans, air purifiers, and insect control devices. Our Nutritional Supplements segment is a leading provider of premium branded vitamins, minerals and supplements, as well as other health products sold directly to consumers. Our Beauty segment products include electric hair care, beauty care and wellness appliances; grooming tools and accessories; and liquid-, solid- and powder-based personal care and grooming products.

Our business is seasonal due to different calendar events, holidays and seasonal weather patterns. Historically, our highest sales volume and operating income occur in our third fiscal quarter ending November 30th. We purchase our products from unaffiliated manufacturers, most of which are located in China, Mexico and the United States.

Our consolidated condensed financial statements are prepared in U.S. Dollars and in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. We have reclassified, combined or separately disclosed certain amounts in the prior period’s consolidated condensed financial statements and accompanying footnotes to conform to the current period’s presentation. These reclassifications had no effect on previously reported results of operations, working capital or stockholders’ equity.

6

Note 2 – New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that we adopt according to the various timetables the FASB specifies. Unless otherwise discussed below, we believe the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial position, results of operations and cash flows upon adoption.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”, issued as a new Topic, ASC Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB affirmed its proposal to defer the effective date of the standard to annual reporting periods beginning after December 15, 2017 (and interim reporting periods within those years). Accordingly, we will be required to adopt the new standard in our fiscal year 2019 and can adopt either retrospectively or as a cumulative effect adjustment as of the date of adoption. We are currently evaluating the effect this new accounting guidance may have on our consolidated results of operations, cash flows and financial position.

Note 3 – Commitments and Contingencies

We are involved in various legal claims and proceedings in the normal course of operations. We believe the outcome of these matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity.

Our products are under warranty against defects in material and workmanship for periods ranging from two to five years. We estimate our warranty accrual using historical trends and believe that these trends are the most reliable method by which we can estimate our warranty liability. The following table summarizes the activity in our warranty accrual for the periods covered below:

ACCRUAL FOR WARRANTY RETURNS

(in thousands)

Three Months Ended August 31,

Six Months Ended August 31,

2015

2014 (1)

2015

2014 (1)

Beginning balance

$

20,894

$

19,140

$

23,553

$

19,269

Additions to the accrual

13,244

16,828

26,758

29,514

Reductions of the accrual - payments and credits issued

(13,341)

(13,476)

(29,514)

(26,291)

Ending balance

$

20,797

$

22,492

$

20,797

$

22,492

(1)

Includes opening balance accrual additions totaling $3.19 million and relatedpayments and credits issued of $1.82

million attributed to the Healthy Directions acquisition.

7

Note 4 – Earnings per Share

We compute basic earnings per share using the weighted average number of shares of common stock outstanding during the period. We compute diluted earnings per share using the weighted average number of shares of common stock outstanding plus the effect of dilutive securities. Dilutive securities at any given point in time may consist of outstanding stock options, issued and contingently issuable unvested restricted share units, and other performance-based share awards. Options for common stock are excluded from the computation of diluted earnings per share if their effect is antidilutive. See Note 15 to these consolidated condensed financial statements for more information regarding share-based payment arrangements.

For the periods covered below, the basic and diluted shares are as follows:

WEIGHTED AVERAGE DILUTED SECURITIES

(in thousands)

Three Months Ended August 31,

Six Months Ended August 31,

2015

2014

2015

2014

Weighted average shares outstanding, basic

28,435

28,372

28,478

28,738

Incremental shares from share-based payment arrangements

551

397

559

454

Weighted average shares outstanding, diluted

28,986

28,769

29,037

29,192

Dilutive securities, stock options

705

687

751

708

Dilutive securities, unvested or unsettled share awards

291

260

292

246

Antidilutive securities, stock options

150

241

173

237

Note 5 – Segment Information

The following tables contain segment information for the periods covered below:

THREE MONTHS ENDED

(in thousands)

Healthcare /

Nutritional

August 31, 2015

Housewares

Home Environment

Supplements (1)

Beauty

Total

Sales revenue, net

$

78,848

$

143,254

$

38,048

$

108,979

$

369,129

Asset impairment charges

-

-

-

-

-

Operating income

15,142

4,808

2,969

9,513

32,432

Capital and intangible asset expenditures

291

1,224

775

939

3,229

Depreciation and amortization

1,075

5,514

1,965

2,319

10,873

Healthcare /

Nutritional

August 31, 2014

Housewares

Home Environment

Supplements (1)

Beauty

Total

Sales revenue, net

$

69,637

$

126,218

$

24,634

$

99,460

$

319,949

Asset impairment charges

-

-

-

-

-

Operating income

13,891

4,508

110

6,094

24,603

Capital and intangible asset expenditures

218

1,081

177

390

1,866

Depreciation and amortization

889

5,027

1,359

2,718

9,993

(1)

Includes three- and two-months of operations of the Nutritional Supplements segment for the three months ending August 31, 2015 and 2014, respectively. The segment was formed upon the acquisition of Healthy Directions on June 30, 2014.

8

SIX MONTHS ENDED

(in thousands)

Healthcare /

Nutritional

August 31, 2015

Housewares

Home Environment

Supplements (1)

Beauty

Total

Sales revenue, net

$

144,034

$

286,296

$

77,488

$

206,656

$

714,474

Asset impairment charges

-

-

-

3,000

3,000

Operating income

26,325

13,226

5,589

13,835

58,975

Capital and intangible asset expenditures

616

1,524

1,906

1,900

5,946

Depreciation and amortization

2,083

10,577

3,933

4,634

21,227

Healthcare /

Nutritional

August 31, 2014

Housewares

Home Environment

Supplements (1)

Beauty

Total

Sales revenue, net

$

136,393

$

268,707

$

24,634

$

201,993

$

631,727

Asset impairment charges

-

-

-

9,000

9,000

Operating income

26,926

13,225

110

7,465

47,726

Capital and intangible asset expenditures

1,042

1,487

177

982

3,688

Depreciation and amortization

1,777

10,259

1,359

5,098

18,493

(1)

Includes six-and two-months of operations of the Nutritional Supplements segment for the six months ending August 31, 2015 and 2014, respectively. The segment was formed upon the acquisition of Healthy Directions on June 30, 2014.

We compute segment operating income based on net sales revenue, less cost of goods sold, SG&A, and any asset impairment charges associated with the segment. The SG&A used to compute each segment’s operating income is directly associated with the segment, plus shared service and corporate overhead expenses that are allocable to the segment.In fiscal year 2016, we began making an allocation of shared service and corporate overhead costs to the Nutritional Supplements segment. For the three- and six-monthsended August 31, 2015, those allocations totaled $0.86and$1.60million, respectively. We do not allocate nonoperating income and expense, including interest or income taxes, to operating segments.

Note 6 – Comprehensive Income (Loss)

The table below presents the changes in accumulated other comprehensive income (loss) by component and the amounts reclassified out of accumulated other comprehensive income (loss) for the 2016 fiscal year-to-date:

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT

(in thousands)

Unrealized HoldingGains(Losses)

on Cash Flow Hedges (1)

Balance at February 28, 2015

$

(76)

Other comprehensive income before reclassification

812

Amounts reclassified out of accumulated other comprehensive income

(240)

Tax effects

(175)

Other Comprehensive Income (Loss)

397

Balance at August 31, 2015

$

321

(1)

Represents activity associated with foreign currency contracts. Includes net deferred tax (expense) benefits of ($0.14) and $0.03 million at August 31, 2015 and February 28, 2015, respectively.